RNS No 5807f
CITY SITE ESTATES PLC
29th June 1998
CITY SITE ESTATES plc
INTERIM ANNOUNCEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 1998
Chairman's Statement
I am pleased to report profit before tax of #949,000 for the six months ended
31 March 1998, an increase of 27% over the corresponding period last year.
Turnover has decreased from #5.35m to #4.85m due mainly to the reduction in
rental income following the sale last October of Page House (formerly Hansard
House), London WC2 which contributed #1.17m a year.
As I announced in my year end statement the Company purchased for cancellation
255,050 preference shares at 73.5p and 2,893,990 at 75p. Given the discount
to the #1 par value, the purchases offered an attractive opportunity to
increase net asset value per ordinary share and to reduce the level of
preference shares.
The Company has further reduced its debt by repaying a #4.375m term loan, and
will continue to reduce borrowings whenever suitable opportunities arise.
Properties sold during the period realised #13.95m in total which was #662,000
above book value.
Page House, London WC2 was sold for #9.25m giving a profit over book value of
#250,000.
Other disposals included Roman Road Industrial Estate, Croydon for #1.2m and
Halesfield Industrial Estate, Telford for #2.15m.
In line with our strategy of investing in properties showing greater prospects
for growth, the Group purchased the 80,000 sq ft Quadrant Shopping Centre in
Coatbridge near Glasgow for a net consideration of #6.25m. De Quincey House,
West Regent Street, Glasgow was acquired for #2.5m and Deans Industrial
Estate, Livingston for #1.3m.
One of the most significant new lettings was made to Demon Internet Ltd., a
subsidiary of Scottish Power, at Northway House, Whetstone. The letting is
for two entire floors comprising 15,000 sq ft and has a combined rental of
#139,000 a year.
The Board continues to remain cautious during a period of consolidation and
continues to review the position of the one preference dividend which remains
in arrears. In the circumstances, the Board regrets it cannot pay an interim
ordinary dividend.
It is my intention to step down as Chairman of the Board of the Company at the
next Annual General Meeting, by which time I will have been Chairman for a
period of eight years. I am pleased to announce that Brian McGhee, who joined
the Board as a Director in 1996, will succeed me as Chairman.
I am also pleased to announce that Richard Gilliland, Chartered Accountant,
will be joining the Board as Financial Director. Richard Gilliland has had a
long connection with the Company as a financial adviser and consultant, and
his appointment will strengthen the Board.
The Company continues its strategy of rebalancing the Group's portfolio with
properties showing greater growth and is currently negotiating further
purchases and sales, in order to improve shareholder value.
W W C Syson
Chairman
29 June 1998
Enquiries: Louis Goodman
Managing Director
Tel: 0141 248 2534
Michael Sandler
Hudson Sandler Limited
Tel: 0171 796 4133
Unaudited Group Profit and Loss Account
For the six months to 31 March 1998
Six months to 6 mths to Year to
31 March 31 March 30 Sept
1998 1997 1997
Note #000 #000 #000
Turnover 2 4,851 5,354 10,827
Property outgoings (490) (343) (717)
Administrative and other expenses (495) (475) (999)
Operating profit 3,866 4,536 9,111
Profit/(loss) on sale of properties 662 68 (995)
Profit on ordinary activities
before interest and taxation 4,528 4,604 8,116
Interest receivable 144 7 205
Interest payable (3,723) (3,866) (8,075)
Profit on ordinary activities
before taxation 949 745 246
Tax on profit on ordinary activities (103) (127) (228)
Profit for the financial period 846 618 18
Dividends paid and proposed on
non-equity shares (414) (508) (910)
Retained profit/(loss) for the period 432 110 (892)
Earnings/(loss) per share 3 2.57p 0.68p (5.42p)
Unaudited Group Balance Sheet
As at 31 March 1998
As at As at As at
31 March 31 March 30 Sept
1998 1997 1997
Note #000 #000 #000
Fixed assets
Tangible assets 94,129 109,096 96,827
Investments 50 50 50
94,179 109,146 96,877
Current assets
Debtors:
Amounts falling due within one year 1,444 1,447 1,629
Cash at bank and in hand 1,586 1,950 7,598
3,030 3,397 9,227
Creditors:
Amounts falling due within one year (9,076) (12,652) (11,500)
Net current liabilities (6,046) (9,255) (2,273)
Total assets less current liabilities 88,133 99,891 94,604
Creditors:
Amounts falling due after one year
(including convertible debt) (66,056) (74,764) (70,597)
Net assets 22,077 25,127 24,007
Capital and reserves
Equity shareholders' funds
Called-up share capital 4,201 4,201 4,201
Profit and loss account 1,438 1,726 5,239
Other reserves 4 671 (164) (4,349)
6,310 5,763 5,091
Non-equity shareholders' funds
Called-up share capital 15,767 19,364 18,916
Shareholders' funds 22,077 25,127 24,007
Unaudited Group Cash Flow Statement
For the six months to 31 March 1998
Six months to 6 mths to Year to
31 March 31 March 30 Sept
1998 1997 1997
Note #000 #000 #000
Net cash inflow from operating
activities 5 3,174 6,062 10,291
Returns on investments and
servicing of finance (4,308) (5,166) (10,559)
Taxation - - (763)
Capital expenditure and
financial investment 9,547 (507) 10,888
Acquisitions and disposals (6,250) - -
Cash inflow before use of liquid
resources and financing 2,163 389 9,857
Management of liquid resources 6,012 - (7,548)
Financing (7,092) 62 (4,434)
Increase/(decrease) in cash 1,083 451 (2,125)
Reconciliation of net cash flow to movement in net debt
Six months to 6 mths to Year to
31 March 31 March 30 Sept
1998 1997 1997
#000 #000 #000
Increase/(decrease) in cash in
the period 1,083 451 (2,125)
Issue costs of new loans - 83 121
Cash flow from decrease/(increase)
in debt 4,732 (62) 4,110
Cash flow from (decrease)/increase
in liquid resources (6,012) - 7,548
Change in net debt resulting
from cash flows (197) 472 9,654
Issue costs amortised in period (88) (63) (131)
Profit on repurchase of convertible
unsecured loan stock - 22 22
Conversion of guarantee to loan - (500) (500)
Movement in net debt in the period (285) (69) 9,045
Net debt at 1 October 1997 (66,728) (75,773) (75,773)
Net debt at 31 March 1998 (67,013) (75,842) (66,728)
Unaudited Additional Statements
For the six months to 31 March 1998
Consolidated statement of total recognised gains and losses
Six months to 6 mths to Year to
31 March 31 March 30 Sept
1998 1997 1997
#000 #000 #000
Profit for the financial period 846 618 18
Gain on repurchase of preference shares 787 - 124
Unrealised surplus on revaluation
of investment properties - - 206
Total gains and losses recognised
relating to the period 1,633 618 348
Consolidated note of historical cost profits and losses
Reported profit on ordinary activities
before taxation 949 745 246
Realisation of property revaluation
(deficits)/gains of previous years (1,871) (314) 4,526
Historical cost (loss)/profit on
ordinary activities before taxation (922) 431 4,772
Historical cost (loss)/profit for
the period retained after taxation
and dividends (1,439) (204) 3,634
Reconciliation of movements in
Group shareholders' funds
Profit for the financial period 846 618 18
Dividends paid and proposed on equity
and non-equity shares (414) (508) (910)
432 110 (892)
Preference shares redeemed (3,149) - (448)
Other recognised gains and losses
relating to the period (net) 787 - 330
New share capital subscribed - 500 500
Net (reduction)/increase in
shareholders' funds (1,930) 610 (510)
Opening shareholders' funds 24,007 24,517 24,517
Closing shareholders' funds 22,077 25,127 24,007
NOTES:
1.The interim statement has been prepared in accordance with the accounting
policies set out in the Group's statutory accounts for the year ended 30
September 1997, except that investment properties were not stated at open
market value at 31 March 1998. Investment properties have been included at
their valuation as at 30 September 1997, adjusted for any capitalised
expenditure since that date.
2.Turnover represents net rental income, management fees and amounts
credited in respect of lease surrenders. This is a change of presentation
from the last statutory accounts in which management fees and amounts
credited in respect of lease surrenders were included under the caption
'other income'. The comparatives for prior periods have been restated to
reflect this change.
3.Earnings/(loss) per ordinary share is based on the Group profit on
ordinary activities after tax and after deducting accrued preference
dividends, divided by the weighted average number of ordinary shares in
issue and ranking for dividend during the period.
4. Other reserves
Six months to Six months to Year to
31 March 31 March 30 September
1998 1997 1997
#000 #000 #000
Share premium 240 240 240
Revaluation reserve (5,089) (2,326) (6,960)
Capital redemption reserve 5,520 1,922 2,371
671 (164) (4,349)
NOTES: (continued)
5.Reconciliation of operating profit to net cash inflow from operating
activities
Six months to Six months to Year to
31 March 31 March 30 September
1998 1997 1997
#000 #000 #000
Operating profit 3,866 4,536 9,111
Depreciation 16 20 35
Decrease in debtors 214 285 124
(Decrease)/increase in creditors (922) 1,221 1,021
3,174 6,062 10,291
6.The financial information for the year ended 30 September 1997 does not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. Statutory accounts for the year, which include an
unqualified audit report, have been filed with the Registrar of Companies.
7.The interim statement will be posted to shareholders on 7 July 1998 and
further copies will be available on request from the Company Secretary at
219 St. Vincent Street, Glasgow G2 5QY.
Review Report
to City Site Estates plc
We have reviewed the interim financial information in respect of the six month
period ended 31 March 1998 set out on pages 3 to 8 which is the responsibility
of, and has been approved by, the Directors. Our responsibility is to report
on the results of our review.
Our review was carried out having regard to the Bulletin "Review of Interim
Financial Information", issued by the Auditing Practices Board. This review
consisted principally of applying analytical procedures to the underlying
financial data, assessing whether accounting policies have been consistently
applied, and making enquiries of group management responsible for financial
and accounting matters. The review excluded audit procedures such as tests of
controls and verification of assets and liabilities and was, therefore,
substantially less in scope and provides less assurance than an audit
performed in accordance with Auditing Standards. Accordingly we do not
express an audit opinion on the interim financial information.
On the basis of our review:
In our opinion, the interim financial information has been prepared using
accounting policies consistent with those adopted by City Site Estates plc in
its financial statements for the year ended 30 September 1997, except for the
change referred to in note 1, on page 8
We are not aware of any material modifications that should be made to the
interim financial information as presented.
Arthur Andersen
Chartered Accountants
199 St. Vincent Street
Glasgow
G2 5QD
29 June 1998
END
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